<PAGE> 1
Seeking new opportunities for
investors in a more competitive
utilities environment.
- -----------------------------------------------
COLONIAL UTILITIES FUND SEMIANNUAL REPORT
- -----------------------------------------------
MAY 31, 1999
Picture of woman holding
baby in window of home
---------------------------
Not FDIC |May Loss Value
Insured |-----------------
No Bank Guaratee
---------------------------
<PAGE> 2
- --------------------------------------------------------------------------------
COLONIAL UTILITIES FUND
- --------------------------------------------------------------------------------
Table of Contents
1 Highlights
2 Portfolio Managers' Report
4 Performance
5 Portfolio of Investments
6 Financial Statements
8 Notes to Financial Statements
10 Financial Highlights
[Photo of PRESIDENT'S MESSAGE
Stephen E. Gibson]
Dear Shareholder:
The six-month period ended May 31, 1999, was characterized
by improving conditions in economies around the world. As
the period began, concerns about a possible global recession
and its potential impact on U.S. corporate profitability
created significant uncertainty. Early in the year, however,
a stream of favorable economic news, rising commodity prices
and improving overseas markets encouraged investors. These
conditions led to rising stock markets around the world,
with several achieving record levels along the way.
At the beginning of the period, a small number of large-cap growth stocks led
the U.S. market's advance. Later, however, investors began to favor cyclical
stocks, such as energy and basic materials. As these stocks rallied, defensive
market sectors -- such as utilities -- weakened, generating disappointing
returns.
Although the investment environment for utility stocks was mixed, your portfolio
managers' emphasis on high-quality, fundamentally strong utility stocks with
attractive growth prospects generated solid total returns. As it has over the
past ten years, Colonial Utilities Fund once again outperformed many of its
peers, as well as the Standard & Poor's Utility Index.(1)
The following report will provide you with more specific information about your
Fund's performance and the strategies employed during the period. As always, we
thank you for choosing Colonial Utilities Fund and for giving us the opportunity
to serve your investment needs.
Respectfully,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
July 12, 1999
(1)Lipper, Inc., a widely respected data provider in the industry, calculates an
average total return for mutual funds with similar investment objectives to the
Fund. The total return for the Lipper Utility Funds category was 11.66% for the
six months ended May 31, 1999. The Fund's Class A shares were ranked in the
second quartile (45 out of 101 funds) for the six-month period, in the second
quartile (26 out of 100 funds) for the one-year period, in the first quartile (8
out of 58 funds) for the five-year period, and in the second quartile (5 out of
12 funds) for the ten-year period. Rankings do not include sales charges.
Performance for different share classes will vary with fees associated with each
class. Past performance cannot predict future results.
Because economic and market conditions change frequently, there can be no
assurance that the trends described above or on the following pages will
continue or come to pass.
<PAGE> 3
- --------------------------------------------------------------------------------
HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX-MONTH TOTAL RETURNS FOR THE PERIOD ENDED 5/31/99(1)
<TABLE>
<CAPTION>
POP or
NAV w/CDSC
--- ------
<S> <C> <C>
Class A 11.62% 6.32%
- ---------------------------------------------------
Class B 11.22% 6.22%
- ---------------------------------------------------
Class C 11.22% 10.22%
- ---------------------------------------------------
Class Z 11.71% N/A
- ---------------------------------------------------
<CAPTION>
NET ASSET VALUE PER SHARE 11/30/98 AND 5/31/99
11/30/98 5/31/99
-------- -------
<S> <C> <C>
Class A $21.13 $22.74
- ---------------------------------------------------
Class B $21.13 $22.71
- ---------------------------------------------------
Class C $21.13 $22.71
- ---------------------------------------------------
Class Z N/A $22.75
- ---------------------------------------------------
<CAPTION>
SIX-MONTH DECLARATIONS AS OF 5/31/99
<S> <C>
Class A $0.798
- ---------------------------------------------------
Class B $0.749
- ---------------------------------------------------
Class C $0.749
- ---------------------------------------------------
Class Z $0.072
- ---------------------------------------------------
<CAPTION>
SEC YIELDS ON 5/31/99(2)
<S> <C>
Class A 1.65%
- ---------------------------------------------------
Class B 0.98%
- ---------------------------------------------------
Class C 0.98%
- ---------------------------------------------------
Class Z 1.98%
- ---------------------------------------------------
</TABLE>
(1) Net asset value (NAV) returns do not include sales charges or contingent
deferred sales charges (CDSC). Public offering price (POP) returns include
maximum sales charge of 4.75% for Class A shares. The CDSC returns reflect the
maximum applicable contingent deferred sales charges for six months of 5% for
Class B shares and 1% for Class C shares. Please refer to page 3 for an
explanation of how performance is calculated for the period prior to the
inception of Class Z shares.
(2) SEC yields reflect the portfolio's earning power net of expenses, expressed
as an annualized percentage of the public offering price per share.
* INVESTOR SENTIMENT SHIFTED MARKET LEADERSHIP.
During the second half of the period, investors began shifting assets into
economically-sensitive cyclical stocks in response to
stronger-than-expected economic growth in the U.S. and signs of improving
global economic conditions. This shift helped natural gas stocks, following
a rise in oil prices, but hurt electric stocks, as investors moved away
from defensive sectors.
* STRONG GAINS IN TELEPHONE STOCKS CONTRIBUTED TO THE FUND'S PERFORMANCE.
Telecommunication stocks benefited from improving economies worldwide, and
an anticipated increase in demand for voice and data communications.
Telephone stocks also gained momentum from increased merger and acquisition
activity.
* UTILITY DEREGULATION PRESENTED OPPORTUNITIES.
As companies continued to restructure their operations to better compete in
a deregulated marketplace, the Fund benefited from the resolution of
proposed regulatory changes in several states.
* FUND OUTPERFORMS INDEX.
Despite significant changes in many of the utility sectors, the Fund's
overweighting in telecommunications and its natural gas positions helped
the Fund's Class A shares return of 11.62% to outperform the S&P Utility
Index and many of its peers.
COLONIAL UTILITIES FUND OUTPERFORMED
S&P UTILITY INDEX
[BAR CHART]
Colonial Utilities Fund 11.62%
S&P Utility Index 7.76%
Lipper Utility Fund Avg. 11.66%
11/30/98 - 5/31/99
The Standard & Poor's Utility Index is an unmanaged index that tracks the
performance of domestic equity utility stocks. Unlike mutual funds, indexes are
not investments, do not incur fees or expenses and are not professionally
managed. It is impossible to invest directly in an index.
<PAGE> 4
SEMIANNUAL REPORT: COLONIAL UTILITIES FUND
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS' REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECTOR BREAKDOWNS 11/30/98 VS. 5/31/99
11/30/98 5/31/99
-------- -------
<S> <C> <C>
Telecommunications 40.9% 41.9%
Electric Services 43.4% 38.5%
Gas Services 9.2% 13.7%
Non-utility stocks 4.5% 4.7%
Cash and other 2.0% 1.2%
</TABLE>
TOP FIVE COUNTRY ALLOCATIONS AS OF 5/31/99
<TABLE>
<S> <C>
United States 85.41%
Switzerland 3.26%
Italy 2.82%
Spain 2.35%
Mexico 2.09%
</TABLE>
Sector and country breakdowns are calculated as a percentage of total net
assets.Because the Fund is actively managed, there can be no guarantee the Fund
will continue to invest in these countries or maintain these sector weightings
in the future.
BOUGHT
- --------------------------------------------------------------------------------
TELENORTE LESTE (TNE)
TeleNorte Leste (0.35% of net assets) represents an opportunistic purchase in
Brazil's recently privatized telephone industry. TNE's price rose significantly
in response to its competitive strength providing telecommunications services in
Rio de Janeiro, Brazil's second largest service area.
- --------------------------------------------------------------------------------
FUND OUTPERFORMED THE UTILITY STOCK UNIVERSE
Colonial Utilities Fund generated attractive total returns despite a challenging
environment. For the six-month period ended May 31, 1999, the Fund's Class A
shares, based on net asset value, returned 11.62% while the S&P Utility Index
returned 7.76%.
TELECOMMUNICATIONS STOCKS ADVANCED STRONGLY
Utility stock prices were depressed for much of the period as investors sought
stocks they expected would benefit from accelerating economic growth, both here
and abroad. An example of this trend was telephone stocks, which advanced
strongly over the past six months in response to their perceived growth
potential. Stocks of companies that have broadened their product lines to
provide voice, data and Internet capacity are expected to benefit from
revitalized domestic and international economies. Many telephone companies have
chosen partnerships and mergers as the fastest way to expand their services and
better compete for market share.
FUND'S OVERWEIGHTING IN TELEPHONE STOCKS DROVE PERFORMANCE
Although the portfolio remained diversified among the utility market's
sub-sectors -- electricity, natural gas and telephone -- we were overweighted in
telephone stocks, which represented approximately 42% of the Fund's net assets
at the end of the period. This strategy rewarded shareholders when telephone
stocks outperformed electric and gas stocks. As we built up our
telecommunications holdings, we looked for established, well-managed companies
with strong cash flows that could benefit from increasing demand for data
communication and networking, Internet and cellular services. Many of the Fund's
telephone investments enjoyed strong price gains.
DEREGULATION PRESENTED OPPORTUNITIES IN ELECTRIC STOCKS
The electric utility industry continued to make progress towards a competitive
marketplace. Many companies have restructured or repositioned themselves to meet
the challenges presented by a deregulated environment. Although electric stocks
generally underperformed other utility market sectors during the period, the
portfolio benefited from several holdings in states that resolved regulatory
issues. For example, stock prices of Texas Utilities and Reliant Energy (3.13%
and 2.06% of net assets, respectively) were weak as the Texas Legislature
debated alternative deregulation plans. Late in the period, they agreed on a
program that will reallocate market share, maintain prices and protect
utilities' distribution rights. In response, both stocks rallied. We also added
an investment in Public Service of New Mexico (0.73% of net assets). Although
the stock had suffered from an oppressive regulatory environment, it
2
<PAGE> 5
met our investment criteria by offering high-quality management, strong service
territory growth and an attractive dividend yield. The stock's price rose after
several favorable regulatory rulings were handed down.
OUTLOOK IS POSITIVE DESPITE INDUSTRY CHANGES
We expect changes in the traditional utility sectors will provide investors with
opportunities and pitfalls. As these industries evolve from a regulated,
monopolistic orientation toward a competitive, value-added service orientation,
we expect to actively seek out fundamentally strong companies with good
management service territories, growth and above-average earnings potential. We
believe the Fund's long-term performance track record speaks strongly to our
conservative emphasis on high-quality utility stocks that have provided capital
appreciation potential and current income.
/s/ Ophelia Barsketis /s/ Deborah Jansen
OPHELIA BARSKETIS and DEBORAH JANSEN are co-managers of Colonial Utilities
Fund and are senior vice presidents of Colonial Management Associates, Inc.
and Stein Roe & Farnham Incorporated.
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 5/31/99
<TABLE>
<CAPTION>
Share Class A B C Z
Inception 3/4/92(1) 5/5/92 8/1/97 1/29/99
- --------------------------------------------------------------------------------
NAV POP NAV w/CDSC NAV w/CDSC NAV
- --------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
1 year 20.91% 15.17% 20.01% 15.01% 20.01% 19.01% 21.00%
- --------------------------------------------------------------------------------
5 years 18.68 17.54 17.81 17.60 18.36 18.36 18.70
- --------------------------------------------------------------------------------
10 years 13.57 13.01 12.97 12.97 13.41 13.41 13.57
- --------------------------------------------------------------------------------
</TABLE>
(1)Change in investment policies.
Past performance cannot predict future results. Returns and value of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. Net asset value (NAV) returns do not
include sales charges or contingent deferred sales charges (CDSC). Public
offering price (POP) returns include the maximum sales charge of 4.75% for Class
A shares. The CDSC returns reflect the maximum sales charges of 5% for one year
and 2% for five years for Class B shares, and 1% for one year for Class C
shares. Performance for different share classes will vary based on differences
in sales charges and fees associated with each class.
Class B, C and Z share (newer class shares) performance information includes
returns of the Fund's Class A shares (the oldest existing fund class) for
periods prior to the inception dates of the newer class shares. These Class A
share returns are not restated to reflect any expense differential (e.g., Rule
12b-1 fees) between Class A shares and newer class shares. Had the expense
differential been reflected, the returns for the periods prior to the inception
of Class B and C shares would have been lower.
TOP 10 HOLDINGS AS OF 5/31/99
Williams Cos., Inc. 6.26%
- ---------------------------------
Ameritech Corp. 3.87%
- ---------------------------------
BellSouth Corp. 3.84%
- ---------------------------------
MCI WorldCom, Inc. 3.76%
- ---------------------------------
GTE Corp. 3.49%
- ---------------------------------
Bell Atlantic Corp. 3.41%
- ---------------------------------
FPL Group, Inc. 3.40%
- ---------------------------------
SBC Communications 3.34%
- ---------------------------------
Swisscom AG 3.26%
- ---------------------------------
Texas Utilities Co. 3.13%
- ---------------------------------
Holdings are calculated as a percentage of total net assets.Because the Fund is
actively managed, there can be no guarantee the Fund will continue to hold these
securities in the future.
HELD
- --------------------------------------------------------------------------------
FRONTIER CORP.
MCI WORLDCOM, INC.
Frontier Corp.'s (2.52% of net assets) price has increased in response to its
announced acquisition by Global Crossing, a Bermuda-based alternative access
provider. MCI WorldCom, Inc. (3.76% of net assets) benefited from a 1998 merger
that produced a large global company with excellent growth potential,
particularly in South America and Europe where telecommunications monopolies are
being dissolved and privatized.
3
<PAGE> 6
- -----------------------------------
INVESTMENT PORTFOLIO
- -----------------------------------
May 31, 1999 (Unaudited, In Thousands)
<TABLE>
<CAPTION>
COLONIAL UTILITIES FUND
- --------------------------------------------------------------------------------
COMMON STOCKS AND
CONVERTIBLES (94.7%) COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
MANUFACTURING (1.5%)
COMMUNICATIONS EQUIPMENT
Lucent Technologies, Inc. 300 $ 17,063
---------
MINING & ENERGY (2.6%)
OIL & GAS FIELD SERVICES
Enron Corp. 418 29,803
---------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES (90.6%)
ELECTRIC, GAS & SANITARY SERVICES (0.6%)
Sempra Energy 300 6,450
---------
ELECTRIC SERVICES (34.4%)
AES Corp. (a) 600 29,850
American Electric Power Co., Inc. 125 5,422
Boston Edison Co. 100 4,400
Citizens Utilities Co.,
5% Convertible Preferred 100 4,400
DPL, Inc. 1,600 28,900
DTE Energy Co. 400 17,425
Duke Power Co. 260 15,681
Eastern Utilities Associates 125 3,606
Edison International 1,000 27,500
Entergy Corp. 350 11,353
FirstEnergy Corp. 550 17,496
FPL Group, Inc. 672 39,096
GPU, Inc. 700 30,494
Interstate Energy Corp. 285 8,603
Kansas City Power & Light Co. 400 11,125
Peco Energy Co. 513 25,105
Pinnacle West Capital Corp. 235 9,841
Public Service Co. of New Mexico 406 8,425
Public Service Enterprise Group, Inc. 100 4,194
Reliant Energy, Inc. 774 23,607
Sierra Pacific Resources 275 10,003
Southern Co. 300 8,513
Texas Utilities Co. 800 36,000
Unicom Corp. 200 8,463
Utilicorp United, Inc. 225 5,611
---------
395,113
---------
GAS SERVICES (13.7%)
Coastal Corp. 900 $ 34,706
Enron Corp., 8.000% MIPS 400 10,025
KN Energy, Inc., 8.250% PEPS 225 8,044
MCN Energy Group Inc., 8.750%
PRIDES 860 17,200
MDU Resources Group, Inc. 263 6,005
Williams Cos., Inc. 1,389 71,942
Williams Cos., Inc., $3.50 Convertible
Preferred 37 9,002
---------
156,924
---------
TELECOMMUNICATIONS (41.9%)
AT&T Corp. 345 19,148
Ameritech Corp. 676 44,502
Bell Atlantic Corp. 716 39,212
BellSouth Corp. 934 44,059
Cincinnati Bell, Inc. 450 10,884
Frontier Corp. 550 28,944
GTE Corp. 636 40,076
MCI WorldCom, Inc. (a) 500 43,187
SBC Communications, Inc.,
Class A 750 38,344
Sonera Group Oyj Fi 1,200 23,292
Swisscom AG Sz 104 37,463
Tele Norte Leste
Participacoes SA ADR Bz 245 4,012
Telecom Corp. of
New Zealand NZ 150 5,194
Telecom Italia SPA ADR It 315 32,384
Telefonica de Espana ADR Sp 187 27,014
Telefonos de Mexico SA Mx 300 23,981
US West Communications
Group 363 19,614
---------
481,310
---------
TOTAL COMMON STOCKS & CONVERTIBLES
(cost of $664,512) 1,086,663
---------
PREFERRED STOCKS (3.3%)
- --------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES (3.3%)
ELECTRIC SERVICES
Entergy Arkansas, Inc.:
7.800% 10 1,021
7.880% 9 906
Entergy Gulf States Utilities:
7.560% 18 1,773
8.000% 30 750
</TABLE>
<PAGE> 7
- -----------------------------------
INVESTMENT PORTFOLIO
- -----------------------------------
May 31, 1999 (Unaudited, In Thousands)
<TABLE>
<CAPTION>
COLONIAL UTILITIES FUND
- --------------------------------------------------------------------------------
COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Jersey Central Power &
Light Co., 7.880%, Series E 15 $ 1,560
NiSource, Inc., 7.750% 120 6,143
Northern Indiana Public
Service Co., 7.440% 9 903
Ohio Edison Co., 7.750% 240 6,090
Pennsylvania Power Co., 7.750% 15 1,551
TU Electric Capital, TOPRS,
8.250% 680 17,765
----------
38,462
----------
TOTAL PREFERRED STOCKS
(cost of $54,132) 38,462
----------
ADJUSTABLE RATE PREFERRED STOCKS (0.8%)
- --------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES (0.8%)
ELECTRIC SERVICES
Cleveland Electric Illuminating
Co., Series L 65 6,573
Entergy Gulf States Utilities,
Series A 15 1,575
Toledo Edison Co., Series A, 40 1,000
----------
9,148
----------
TOTAL ADJUSTABLE RATE PREFERRED STOCKS
(cost of $8,556) 9,148
----------
TOTAL INVESTMENTS (98.8%)
(cost of $727,200)(b) 1,134,273
----------
SHORT-TERM OBLIGATIONS (1.0%) PAR
- --------------------------------------------------------------------------------
Repurchase agreement with ABN
AMRO Chicago Corp., dated
05/28/99, due 06/01/99 at 4.800%,
collateralized by U.S. Treasury
bonds & notes with various
maturities to 2027, market value
$11,575 (repurchase proceeds
$11,377) $11,371 11,371
----------
OTHER ASSETS AND LIABILITIES, NET (0.2%) 2,832
==========
NET ASSETS (100%) $1,148,476
==========
<CAPTION>
SUMMARY OF SECURITIES BY
COUNTRY COUNTRY VALUE % TOTAL
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
United States $ 980,933 86.4
Switzerland Sz 37,463 3.3
Italy It 32,384 2.8
Spain Sp 27,014 2.3
Mexico Mx 23,981 2.2
Finland Fi 23,292 2.1
New Zealand NZ 5,194 0.5
Brazil Bz 4,012 0.4
---------- -----
$1,134,273 100.0
========== =====
</TABLE>
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
------- --------------------------------------
ADR American Depositary Receipt
MIPS Monthly Income Preferred Stock
PEPS Premium Equity Participating Security
PRIDES Preferred Redeemable Increased
Dividend Equity Security
TOPRS Trust Originated Preferred
Redeemable Securities
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing.
(b) Cost for federal income tax purposes is the same.
5
See notes to financial statements.
<PAGE> 8
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
May 31, 1999 (Unaudited)
(in thousands except for per share amounts and footnotes)
<TABLE>
<CAPTION>
COLONIAL UTILITIES FUND
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments at value (cost $727,200) $1,134,273
Short-term obligations 11,371
----------
1,145,644
Receivable for:
Dividends $3,320
Fund shares sold 1,293
Interest 6
Other 250 4,869
------ ----------
Total Assets 1,150,513
LIABILITIES
Payable for:
Fund shares repurchased 2,015
Accrued:
Deferred Trustees fee 22
------
Total Liabilities 2,037
----------
NET ASSETS $1,148,476
==========
Net asset value & redemption price per share
-- Class A ($369,172/16,234) $ 22.74(a)
==========
Maximum offering price per share
-- Class A ($22.74/0.9525) $ 23.87(b)
==========
Net asset value & offering price per share
-- Class B ($775,647/34,155) $ 22.71(a)
==========
Net asset value & offering price per share
-- Class C ($3,295/145) $ 22.71(a)
==========
Net asset value & offering price per share
-- Class Z ($362/16) $ 22.75
==========
COMPOSITION OF NET ASSETS
Capital paid in $ 706,143
Undistributed net investment income 1,279
Accumulated net realized gain 33,981
Net unrealized appreciation 407,073
----------
$1,148,476
==========
</TABLE>
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Six Months Ended May 31, 1999 (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
COLONIAL UTILITIES FUND
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 16,625
Interest 298
--------
Total investment income (net of
nonreclaimable foreign taxes
withheld at source which
amounted to $50) 16,923
EXPENSES
Management fee $3,602
Service fee -- Class A, Class B, Class C 1,402
Distribution fee -- Class B 2,829
Distribution fee -- Class C 11
Transfer agent 1,269
Bookkeeping fee 194
Registration fee 17
Custodian fee 26
Audit fee 20
Trustees fee 18
Reports to shareholders 10
Legal fee 3
Other 47 9,448
------ --------
Net Investment Income 7,475
--------
NET REALIZED & UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments 34,100
Foreign currency transactions (11)
Net Realized Gain ------ 34,089
Net change in unrealized appreciation 78,591
--------
Net Gain 112,680
--------
Increase in Net Assets from Operations $120,155
========
</TABLE>
6 See notes to financial statements.
<PAGE> 9
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
COLONIAL UTILITIES FUND
- ------------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
MAY 31, NOVEMBER 30,
1999(a) 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income $ 7,475 $ 22,348
Net realized gain 34,089 91,358
Net unrealized appreciation 78,591 76,078
----------- -----------
Net Increase from Operations 120,155 189,784
Distributions:
From net investment income -- Class A (2,362) (9,180)
In excess of net investment income -- Class A -- (228)
From net realized gains -- Class A (10,862) (239)
From net investment income -- Class B (3,237) (13,843)
In excess of net investment income -- Class B -- (344)
From net realized gains -- Class B (22,812) (507)
From net investment income -- Class C (12) (28)
In excess of net investment income -- Class C -- (1)
From net realized gains -- Class C (82) (1)
----------- -----------
80,788 165,413
----------- -----------
Fund Share Transactions:
Receipts for shares sold -- Class A 8,638 66,629
Value of distributions reinvested -- Class A 11,162 7,574
Cost of shares repurchased -- Class A (28,078) (104,245)
----------- -----------
(8,278) (30,042)
----------- -----------
Receipts for shares sold -- Class B 28,791 48,893
Value of distributions reinvested -- Class B 22,156 12,446
Cost of shares repurchased -- Class B (65,816) (120,361)
----------- -----------
(14,869) (59,022)
----------- -----------
Receipts for shares sold -- Class C 880 2,231
Value of distributions reinvested -- Class C 91 28
Cost of shares repurchased -- Class C (477) (443)
----------- -----------
494 1,816
----------- -----------
Receipts for shares sold -- Class Z 346 --
Cost of shares repurchased -- Class Z (2) --
----------- -----------
344 --
----------- -----------
Net Decrease from Fund
Share Transactions (22,309) (87,248)
----------- -----------
Total Increase 58,479 78,165
Net Assets
Beginning of period 1,089,997 1,011,832
----------- -----------
End of period (net of undistributed and
including overdistributed net investment income of $1,279 and $585, respectively) $ 1,148,476 $ 1,089,997
=========== ===========
</TABLE>
(a) Class Z shares were initially offered on January 29, 1999.
7
See notes to financial statements.
<PAGE> 10
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS -- CONT.
- --------------------------------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
COLONIAL UTILITIES FUND
- --------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
MAY 31, NOVEMBER 30,
1999(a) 1998
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NUMBER OF FUND SHARES
Sold -- Class A 402 3,463
Issued for distributions reinvested -- Class A 517 385
Repurchased -- Class A (1,299) (5,374)
------ ------
(380) (1,526)
------ ------
Sold -- Class B 1,334 2,464
Issued for distributions reinvested -- Class B 1,025 634
Repurchased -- Class B (3,053) (6,112)
------ ------
(694) (3,014)
------ ------
Sold -- Class C 41 112
Issued for distributions reinvested -- Class C 4 2
Repurchased -- Class C (22) (22)
------ ------
23 92
------ ------
Sold -- Class Z 16 --
Issued for distributions reinvested -- Class Z (b) --
Repurchased -- Class Z (b) --
------ ------
16 --
------ ------
</TABLE>
(a) Class Z shares were initially offered on January 29, 1999.
(b) Rounds to less than one.
8 See notes to financial statements.
<PAGE> 11
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
May 31, 1999 (Unaudited)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial Utilities Fund (the Fund), a series of
Liberty Funds Trust IV, formerly Colonial Trust IV, the accompanying financial
statements contain all normal and recurring adjustments necessary for the fair
presentation of the financial position of the Fund at May 31, 1999, and the
results of its operations, the changes in its net assets and the financial
highlights for the six months then ended.
NOTE 2. ACCOUNTING POLICIES
ORGANIZATION:
The Fund is a diversified portfolio of a Massachusetts business trust,
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Fund's investment objective is to seek
current income and long-term growth. The Fund may issue an unlimited number of
shares. The Fund offers four classes of shares: Class A, Class B, Class C and
Class Z. Class A shares are sold with a front-end sales charge and a 1.00%
contingent deferred sales charge on redemptions made within eighteen months on
an original purchase of $1 million to $5 million. Class B shares are subject to
an annual distribution fee and a contingent deferred sales charge. Class B
shares will convert to Class A shares when they have been outstanding
approximately eight years. Class C shares are subject to a contingent deferred
sales charge on redemptions made within one year after purchase and an annual
distribution fee. Effective January 29, 1999, the Fund began offering Class Z
shares which are offered continuously at net asset value. There are certain
restrictions on the purchase of Class Z shares. Please refer to a prospectus.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS:
Equity securities generally are valued at the last sale price or, in the case of
unlisted or listed securities for which there were no sales during the day, at
current quoted bid prices.
Forward currency contracts are valued based on the weighted value of the
exchange traded contracts with similar durations.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
The value of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates.
Portfolio positions for which market quotations are not readily available are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains (losses) are based upon the specific identification
method for both financial statement and federal income tax purposes.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS:
All income, expenses (other than the Class B and Class C distribution fees), and
realized and unrealized gains (losses), are allocated to each class
proportionately on a daily basis for purposes of determining the net asset value
of each class.
Class B and Class C per share data and ratios are calculated by adjusting the
expense and net investment income per share data and ratios for the Fund for the
entire period by the distribution fee applicable to Class B and Class C shares
only.
FEDERAL INCOME TAXES:
Consistent with the Fund's policy to qualify as a regulated investment company
and to distribute all of its taxable income, no federal income tax has been
accrued.
DISTRIBUTIONS TO SHAREHOLDERS:
As of March 22, 1999, distributions to shareholders are recorded on the ex-date.
Prior to March 22, 1999, the Fund declared and recorded distributions daily and
paid monthly.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforwards) under income tax regulations.
FOREIGN CURRENCY TRANSACTIONS:
Net realized and unrealized gains (losses) on foreign currency transactions
includes the fluctuation in exchange rates on gains (losses) between trade and
settlement dates on securities transactions, gains (losses) arising from the
disposition of foreign currency and currency gains (losses) between the accrual
and payment dates on dividends and interest income and foreign withholding
taxes.
9
<PAGE> 12
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
May 31, 1999 ( Unaudited)
The Fund does not distinguish that portion of gains (losses) on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included with
the net realized and unrealized gains (losses) on investments.
FORWARD CURRENCY CONTRACTS:
The Fund may enter into forward currency contracts to purchase or sell foreign
currencies at predetermined exchange rates in connection with the settlement of
purchases and sales of securities. The Fund may also enter into forward currency
contracts to hedge certain other foreign currency denominated assets. The
contracts are used to minimize the exposure to foreign exchange rate
fluctuations during the period between trade and settlement date of the
contracts. All contracts are marked-to-market daily, resulting in unrealized
gains (losses) which become realized at the time the forward currency contracts
are closed or mature. Realized and unrealized gains (losses) arising from such
transactions are included in net realized and unrealized gains (losses) on
foreign currency transactions. Forward currency contracts do not eliminate
fluctuations in the prices of the Fund's portfolio securities. While the maximum
potential loss from such contracts is the aggregate face value in U.S. dollars
at the time the contract was opened, exposure is typically limited to the change
in value of the contract (in U.S. dollars) over the period it remains open.
Risks may also arise if counterparties fail to perform their obligations under
the contracts.
OTHER:
Corporate actions are recorded on the ex-date. Interest income is recorded on
the accrual basis.
The Fund's custodian takes possession through the federal book-entry system of
securities collateralizing repurchase agreements. Collateral is marked-to-market
daily to ensure that the market value of the underlying assets remains
sufficient to protect the Fund. The Fund may experience costs and delays in
liquidating the collateral if the issuer defaults or enters bankruptcy.
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE:
Stein Roe & Farnham Incorporated (the Advisor) is the investment Advisor of the
Fund and furnishes accounting and other services and office facilities for a
monthly fee based on the Fund's average net assets as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS ANNUAL FEE RATE
- -------------------------------------------------------------------
<S> <C>
First $1 billion 0.65%
Over $1 billion 0.60%
</TABLE>
BOOKKEEPING FEE:
Colonial Management Associates, Inc. provides bookkeeping and pricing services
for $27,000 per year plus a percentage of the Fund's average net assets as
follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS ANNUAL FEE RATE
- --------------------------------------------------------------------
<S> <C>
First $50 million No charge
Next $950 million 0.035%
Next $1 billion 0.025%
Next $1 billion 0.015%
Over $3 billion 0.001%
</TABLE>
TRANSFER AGENT:
Liberty Funds Services, Inc., (the Transfer Agent), an affiliate of the Advisor,
provides shareholder services for a monthly fee equal to 0.20% annually of the
Fund's average net assets and receives reimbursement for certain out-of-pocket
expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES:
Liberty Funds Distributor, Inc., (the Distributor), a subsidiary of the Advisor,
is the Fund's principal underwriter. During the six months ended May 31, 1999,
the Fund has been advised that the Distributor retained net underwriting
discounts of $24,261 on sales of the Fund's Class A shares and received
contigent deferred sales charges (CDSC) of $945, $334,394 and $834 on Class A,
Class B and Class C, share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires the payment of a service fee to
the Distributor equal to 0.25% annually on Class A, Class B and Class C net
assets as of the 20th of each month. The plan also requires the payment of a
distribution fee to the Distributor equal to 0.75% annually of the average net
assets attributable to Class B and Class C shares only.
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
OTHER:
The Fund pays no compensation to its officers, all of whom are employees of the
Advisor.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY:
During the six months ended May 31, 1999, purchases and sales of investments,
other than short-term obligations, were $102,881,762 and $149,577,771,
respectively.
10
<PAGE> 13
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
May 31, 1999 ( Unaudited)
Unrealized appreciation (depreciation) at May 31, 1999, based on cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation $411,853,633
Gross unrealized depreciation (4,780,791)
------------
Net unrealized appreciation $407,072,842
============
</TABLE>
OTHER:
The Fund concentrates its investments in utility securities, subjecting it to
greater risk than a fund that is more diversified.
There are certain additional risks involved when investing in foreign securities
that are not inherent with investments in domestic securities. These risks may
involve foreign currency exchange rate fluctuations, adverse political, and
economic developments and the possible prevention of foreign currency exchange
or the imposition of other foreign government laws or restrictions.
NOTE 5. LINE OF CREDIT
The Fund may borrow up to 33 1/3% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one of the
following options determined at the inception of the loan: (1) federal funds
rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore loan
rate plus 1/2 of 1%. There were no borrowings under the line of credit during
the six months ended May 31, 1999.
11
<PAGE> 14
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
COLONIAL UTILITIES FUND 1999
- ----------------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED MAY 31 (UNAUDITED) CLASS A CLASS B CLASS C CLASS Z(a)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $21.130 $21.130 $21.130 $21.500
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.177 0.128 0.128 0.108
Net realized and unrealized gain 2.231 2.201 2.201 1.214
------- ------- ------- -------
Total from Investment Operations 2.408 2.329 2.329 1.322
------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.141) (0.092) (0.092) (0.072)
From net realized gain (0.657) (0.657) (0.657) --
------- ------- ------- -------
Total Distributions Declared to Shareholders (0.798) (0.749) (0.749) (0.072)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $22.740 $22.710 $22.710 $22.750
------- ------- ------- -------
Total return (b)(c) 11.62% 11.22% 11.22% 6.18%
======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses (d)(e) 1.18% 1.93% 1.93% 0.93%
Net investment income (d)(e) 1.85% 1.10% 1.10% 2.10%
Portfolio turnover (c) 9% 9% 9% 9%
Net assets at end of period (in millions) $ 369 $ 776 $ 3 $ (f)
</TABLE>
(a) Class Z shares were initially offered on January 29, 1999. Per share
amounts reflect activity from that date.
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(c) Not annualized.
(d) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(e) Annualized.
(f) Rounds to less than one.
<TABLE>
<CAPTION>
1998 1997 1996
---------------------------- ------------------------------- ------------------
YEAR ENDED NOVEMBER 30 Class A Class B Class C Class A Class B Class C(a) Class A Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $18.060 $18.060 $18.060 $15.210 $15.210 $16.260 $14.370 $14.370
------- ------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.516 0.365 0.365 0.599 0.481 0.166 0.612 0.502
Net realized and unrealized gain 3.111 3.111 3.111 2.852 2.852 1.794(b) 0.831 0.831
------- ------- ------- ------- ------- ------- ------- -------
Total from Investment Operations 3.627 3.476 3.476 3.451 3.333 1.960 1.443 1.333
------- ------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.530) (0.382) (0.382) (0.483) (0.603)
In excess of net investment income (0.013) (0.010) (0.010) -- -- -- -- --
From net realized gain (0.014) (0.014) (0.014) -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total Distributions Declared to Shareholders (0.557) (0.406) (0.406) (0.601) (0.483) (0.160) (0.603) (0.493)
------- ------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $21.130 $21.130 $21.130 $18.060 $18.060 $18.060 $15.210 $15.210
======= ======= ======= ======= ======= ======= ======= =======
Total return (c) 20.32% 19.41% 19.41% 23.26% 22.36% 12.12%(d) 10.27% 9.45%
======= ======= ======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.19% 1.94% 1.94% 1.22% 1.97% 1.97%(f) 1.20% 1.95%
Net investment income (e) 2.63% 1.88% 1.88% 3.76% 3.01% 2.96%(f) 4.16% 3.41%
Portfolio turnover 22% 22% 22% 7% 7% 7% 8% 8%
Net assets at end of period (in millions) $ 351 $ 736 $ 3 $ 327 $ 684 $ 1 $ 348 $ 729
</TABLE>
(a) Class C shares were initially offered on August 1, 1997. Per share amounts
reflect activity from that date.
(b) The amount shown for a share outstanding does not correspond with the
aggregate net gain on investments for the period due to the timing of sales
and repurchases of Fund shares in relation to fluctuating market values of
the investments of the Fund.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Not annualized.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(f) Annualized.
12
<PAGE> 15
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
COLONIAL UTILITIES FUND
- ----------------------------------------------------------------------------------------------------
1995 1994
--------------------- ----------------------
YEAR ENDED NOVEMBER 30 CLASS A CLASS B CLASS A CLASS B
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.720 $11.720 $13.600 $13.600
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.640 0.544 0.681 0.587
Net realized and unrealized gain (loss) 2.659 2.659 (1.896) (1.896)
------- ------- ------- -------
Total from Investment Operations 3.299 3.203 (1.215) (1.309)
------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.649) (0.553) (0.665) (0.571)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $14.370 $14.370 $11.720 $11.720
======= ======= ======= =======
Total return (a) 28.90% 27.96% (9.04) (9.73)%
======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses 1.21%(b) 1.96%(b) 1.23% 1.98%
Net investment income 5.00%(b) 4.25%(b) 5.49% 4.74%
Portfolio turnover 7% 7% 16% 16%
Net assets at end of period (in millions) $ 400 $ 821 $ 373 $ 744
</TABLE>
(a) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(b) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
13
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14
<PAGE> 17
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15
<PAGE> 18
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16
<PAGE> 19
TRUSTEES & TRANSFER AGENT
SEMIANNUAL REPORT: COLONIAL UTILITIES FUND
- --------------------------------------------------------------------------------
ROBERT J. BIRNBAUM
Consultant (formerly Special Counsel, Dechert, Price & Rhoads; President and
Chief Operating Officer, New York Stock Exchange, Inc.; President, American
Stock Exchange Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore
Bank & Trust Company)
JOHN V. CARBERRY
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
SALVATORE MACERA
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
WILLIAM E. MAYER
Partner, Development Capital, LLC (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board, Chief Executive Officer and Director
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
THOMAS E. STITZEL
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
ROBERT L. SULLIVAN
Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
- --------------------------------------------------------------------------------
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Utilities Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
The Fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call 1-800-426-3750 and additional reports
will be sent to you.
This report has been prepared for shareholders of Colonial Utilities Fund.
This report may also be used as sales literature when preceded or accompanied
by the current prospectus which provides details of sales charges, investment
objectives and operating policies of the Fund and with the most recent copy
of the Liberty Funds Distributor, Inc. Performance Update.
<PAGE> 20
- --------------------------------------------------------------------------------
CHOOSE LIBERTY
- --------------------------------------------------------------------------------
BECAUSE NO SINGLE INVESTMENT MANAGER CAN BE ALL THINGS TO ALL INVESTORS.(SM)
- --------------------------------------------------------------------------------
L I B E R T Y
- --------------------------------------------------------------------------------
[Logo Colonial] Colonial has long been a recognized leader in fixed-income
investing. In addition, Colonial has distinguished itself
with both a traditional value and a more contemporary
approach to equity investing.
- --------------------------------------------------------------------------------
[Logo Crabbe Huson] Crabbe Huson's contrarian investment style seeks long-term
performance by investing in stocks from high-quality,
out-of-favor companies. This risk-averse strategy
capitalizes on the potential of these companies to regain
market popularity.
- --------------------------------------------------------------------------------
[Logo Liberty] LAMCO brings institutional money management to individual
investors through a disciplined multi-manager investment
process that seeks to deliver consistent long-term
returns.
- --------------------------------------------------------------------------------
[Logo Newport] A leader in Asian investingtrademark, Newport has an
unparalleled knowledge of Asian economies, business and
culture.
- --------------------------------------------------------------------------------
[Logo Stein Roe's] Stein Roe's growth management style emphasizes companies
with the ability to create, maintain and grow earnings in
different market environments.
- --------------------------------------------------------------------------------
BOSTON * CHICAGO * NEWYORK * PORTLAND * SANFRANCISCO
- --------------------------------------------------------------------------------
That's why each of these affiliated managers has excelled in a particular
investment style. These managers not only specialize in a distinct investment
style, they hold a passion for their style along with a demonstrated track
record.
Each of these managers is a member of the Liberty Financial Companies (NYSE: L),
a diversified asset accumulation and management organization with approximately
$61 billion in assets under management for more than 1.7 million investors. Many
of the affiliated managers' products are offered by prospectus through Liberty
Funds Distributor, Inc.
Ask your financial advisor to help you develop an investment strategy that
blends the complementary disciplines of different managers into a well-balanced
program tailored to your goals.
- -------------------------------
COLONIAL UTILITIES FUND
- -------------------------------
L I B E R T Y -------------
ALL-STAR * COLONIAL * CRABBE HUSON * NEWPORT * STEIN ROE ADVISOR BULK RATE
U.S. POSTAGE
Liberty Funds Distributor, Inc. (C)1999 PAID
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750 HOLLISTON, MA
Visit us at www.libertyfunds.com PERMIT NO. 20
-------------
UF-03/257H-0699 (7/99) 99/803
